The Post Office has unveiled a significant £500 million initiative aimed at revamping its beleaguered Horizon IT platform, which has been marred by controversy and operational challenges for years. This new strategy encompasses a two-lot framework designed to facilitate the transition from the existing supplier, Fujitsu, to a more effective system that promises to modernise the Post Office’s IT operations.
The first lot is directed at securing a “replacement service provider” tasked with the urgent responsibility of taking over Horizon’s management. The framework specifies that this provider will need to implement swift operational changes, virtualise existing systems, transition to cloud infrastructure, and initiate a comprehensive transformation of services. The appointment is projected to commence in early June 2026, with an initial engagement valued at approximately £322.8 million. This arrangement may extend for an additional two years if key transitions necessitate further support.
The second lot focuses on the procurement of a new electronic point of sale (EPOS) system, which will replace the outdated Horizon platform. The new system is expected to be a commercial off-the-shelf product, in contrast to the bespoke design of Horizon. This contract is set to begin in July of the following year, running until at least 2036, with anticipated costs reaching £169.2 million. The Post Office aims to select a provider that can ensure the new EPOS system meets its future needs while remaining compatible with existing technology.
This forward-looking strategy follows a turbulent history with the Horizon system. In recent years, the Post Office has faced substantial scrutiny and financial strain, notably due to the wrongful convictions of nearly 1,000 sub-postmasters linked to faults within the Horizon software, which many regard as one of the most significant miscarriages of justice in British legal history. This scandal has prompted legislative efforts to expedite exonerations and financial compensations for those affected.
Amidst the backdrop of these developments, the Post Office had previously extended its contract with Fujitsu for one additional year, costing £75 million. This move was partly to bolster transitional support while preparations for the new systems were ongoing. Such extensions are indicative of the complex technical landscape the Post Office must navigate as it strives to modernise its infrastructure. An earlier attempt to transition to a cloud-based solution in 2023 resulted in a £31 million setback, underscoring the challenges that have consistently plagued the Horizon system and delaying replacement plans.
To further complicate matters, the development of the New Branch IT (NBIT) programme, intended as a successor to Horizon, has also faced substantial delays and technical difficulties, compelling the Post Office to reassess its strategy. The programme was initially targeted for completion by March 2024, but has since been put on hold as new options are explored to secure a functional replacement.
Adding to the urgency of these changes, the UK Government has intervened with financial support, providing an additional £136 million to assist in addressing the issues arising from Horizon’s shortcomings. This funding comes in light of the rising costs related to developing an adequate replacement system, reflecting the government’s increasing involvement in ensuring the Post Office’s capacity to deliver efficient services.
As the Post Office prepares to formally invite tenders around the end of June, stakeholders will be closely monitoring how it navigates this critical phase. The dual approach of sourcing new providers while managing the complex legacy of Horizon presents both challenges and opportunities for the future of the UK’s postal services.
The reinstatement of trust among sub-postmasters and the integration of advanced technology stand as pivotal goals for the Post Office, as it aims to rectify past mistakes and embrace a more sustainable operational model for the future.
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Source: Noah Wire Services
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